Competition Bureau investigating potential violations including patient steering, margin squeezing, PPN
The Competition Bureau has obtained a court order to advance its investigation into an employer over concerns that the company may be engaging in anti-competitive practices within the pharmacy sector.
The order, issued by the Federal Court, compels Express Scripts Canada to produce records, written information, and oral testimony relevant to the Bureau’s investigation.
The Bureau is examining alleged anti-competitive conduct that could prevent or limit competition in the pharmacy retail market, including:
- Patient steering through Preferred Provider Networks that force or induce Canadians to use Express Scripts Canada owned or associated pharmacies instead of their pharmacy of choice; and
- Margin squeezing that reduces the margins of its retail pharmacy competitors by increasing its Pharmacy Benefit Manager (PBM) service fee and by requiring a costly and burdensome audit process.
A PBM provides prescription drug claim processing services for insurance providers and pharmacists.
Preferred Pharmacy Network
Meanwhile, a Preferred Provider Network agreement – also referred to as a Preferred Pharmacy Network agreement or a PPN – aims to establish a network of “preferred” pharmacies for a particular insurance provider. In this agreement, an insured individual is either required or encouraged to fill their prescriptions from a pharmacy operator in their insurance provider’s network.
The Bureau is investigating this conduct under the Competition Act’s restrictive trade provisions. These provisions protect against abuse of dominance and agreements or arrangements between businesses that harm competition.
“There is no conclusion of wrongdoing at this time,” said the Competition Bureau.
Previously, the Competition Bureau issued a warning for businesses to watch out for reviews posted by their employees that don't properly disclose their relationship. Employee reviews of a company that give a false or misleading impression to consumers and do not disclose the employee’s connection to the business could be liable under the Competition Act.
Express Scripts Canada manages prescription drug claim processing services and operates four mail-order pharmacies across Canada (excluding Quebec). It’s a subsidiary of U.S.-based Express Scripts, owned by the Cigna Group.
The Competition Act includes provisions to protect Canadian consumers and businesses against restrictive trade practices, including abuse of dominance and agreements that may harm competition.
In 2024, the federal government announced it is expanding the extent of the Immunity and Leniency Programs to include a couple of provisions under the Competition Act.
